More Support for Town Councils in Estate Infrastructure Maintenance and Replacement
The mandatory reserves, alongside the $450 million Lift Enhancement Programme, could strengthen long-term funding for lift upgrades and maintenance across ageing HDB estates.
From 1 April 2017, Town Councils must allocate at least 14% of S&CC collections and government grants to ring-fenced Lift Replacement Funds.
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As our HDB estate infrastructure gets older, more expenditure will be needed for the maintenance and replacement of these infrastructure assets. Town Councils must therefore plan ahead and contribute more to their Sinking Funds to pay for these major expenses, e.g. repainting of HDB blocks, maintenance of building facades, replacement of lifts and water pumps etc.
The Government will help the Town Councils to prepare for these longer-term expenditures in several ways.
First, HDB had earlier announced a $450 million Lift Enhancement Programme (LEP) that will substantially co-fund the Town Councils’ costs of retrofitting older lifts with safety features and enhancements commonly found in newer lifts. These include additional sensors to detect obstructions to the lift door, and to better regulate lift speeds. Some 20,000 lifts, which have been in operation for 18 years or less, are expected to benefit from the LEP.
Second, all Town Councils will have to set up dedicated Lift Replacement Funds (LRF), to be carved out from their Sinking Funds and ring-fenced for future lift replacements. The LRF was announced by MND in September last year, and since then, MND has been working with the Town Councils on the implementation details. Specifically, from 1 April 2017 onwards, the Town Councils will be required to set aside a minimum of 14% of their Service and Conservancy Charges (S&CC) collections and government grants into their new LRF. This will be on top of their regular contributions (another 26% or more of the Town Councils’ collections) to the general Sinking Fund.
Third, MND will increase the S&CC operating grants it currently gives to the Town Councils to help cover their costs, and also provide additional grants to match part of the Town Councils’ contributions to their LRF. Details of the MND assistance measures will be released separately.
While the various forms of Government support will go some way in helping the Town Councils meet their long-term expenditure needs, all Town Councils must also do their part. They must plan ahead prudently and responsibly, ensure that their long-term finances are sustainable, and build up their Sinking Funds and LRF regularly over time.